CHAPTER - 1

INTRODUCTION

What is Retail
Retail derived from the French word retaillier, which means to break bulk.
8 7 6 5 4 3 2 1 0 Sales ($ Trillion) 2005 3.5 2.9 2.2 2.2 1.7 5.5 7.6 Retail Fin.ser Eng Chemicals Pkg. Goods Elec & Tel Automob.

Retailing is the last stage in the movement of goods and services to the consumer. Retail therefore consists of all activities involved in the marketing of goods and services directly to the consumers for their personal, family or household use. Retailer: a person, agent, agency, company or organization instrumental in reaching the goods, merchandise, or services to the ultimate consumer. It is a set of business activities that adds value to the products and services sold to consumers for their personal or family use. A retailer is a business that sells products and/or services to consumers for personal or family use.

THE GLOBAL RETAIL INDUSTRY SCENARIO

Retail has played a major role world over in increasing productivity across a wide range of consumer goods and services .The impact can be best seen in countries like U.S.A., U.K.,Mexico, Thailand and more recently China. Economies of countries like Singapore,Malaysia, Hong Kong, Sri Lanka and Dubai are also heavily assisted by the retail sector. Retail is the second-largest industry in the United States both in number of establishments and number of employees. It is also one of the largest world wide. The retail industry employs more than 22 million Americans and generates more than $3 trillion in retail sale annually. Retailing is a U.S. $7 trillion sector. Wal-Mart is the worlds largest retailer. Already the worlds largest employer with over 1million associates, Wal-Mart displaced oil giant Exxon Mobil as the worlds largest company when it posted $219 billion in sales for fiscal 2001. Wal-Mart has become the most successful retail brand in the world due its ability to leverage size, market clout, and efficiency to create market dominance. Wal-Mart heads Fortune magazine list of top 500 companies in the world. Forbes Annual List of Billionaires has the largest number (45/497) from the retail business.

TOP RETAILERS WORLDWIDE

Wal-Mart Stores, Inc. U.S.A. Carrefour Group France The Kroger Co. U.S.A. The Home Depot, Inc. U.S.A. Metro Germany

RETAIL SCENARIO IN INDIA :

Retail industry in India Retail forecasts in India:
The business in India is expected to reach Rs. 19,070 billion by 2006 Growth of organized retailing in both food and non-food segments Proportion of sales through organized retailing estimated to increase 6% by 2010 by

Retail is Indias largest industry, accounting for over 10 per cent of the countrys GDP and around eight per cent of the employment. Retail industry in India is at the crossroads. It has emerged as one of the most dynamic and fast paced industries with several players entering the market. But because of the heavy initial investments required, break even is difficult to achieve and many of these players have not tasted success so far. However, the future is promising; the market is growing, government policies are becoming more favorable and emerging technologies are facilitating operations. retailing accounts for approximately 10% of Indias GDP and employs more people than any other industry. The challenges for achieving critical mass and generating employment in the retail industry relate to the integration of small and large retail, the integration of rural and urban markets and the integration of supply chains for a unified market. As the corporates the Piramals, the Tatas, the Rahejas, ITC, S.Kumars, RPG Enterprises, and mega retailers- Crosswords, Shoppers Stop, and Pantaloons race to revolutionize the retailing sector, retail as an industry in India is coming alive. Retail sales in India amounted to about Rs.7400 billion in 2002, expanded at an average annual rate of 7% during 1999-2002. With the upturn in economic growth during 2003, retail sales are also expected to expand at a higher pace of nearly 10%. Across the country, retail sales in real terms are predicted to rise more rapidly than consumer expenditure during 2003-08. The forecast growth in

real retail sales during 2003- 2008 is 8.3% per year, compared with 7.1% for consumer expenditure.

Modernization of the Indian retail sector will be reflected in rapid growth in sales of supermarkets, departmental stores and hypermarts. Sales from these largeformat stores are to expand at growth rates ranging from 24% to 49% per year during 2003-2008, according to a latest report by Euromonitor International, a leading provider of global consumer-market intelligence. India is 6th on a global retail development index. The country has the highest per capita outlets in the world - 5.5 outlets per 1000 population. Around 7% of the population in India is engaged in retailing, as compared to 20% in the USA. In a developing country like India, a large chunk of consumer expenditure is on basic necessities, especially food-related items. Hence, it is not surprising that food, beverages and tobacco accounted for as much as 71% of retail sales in 2002. The share of food related items had, however, declined over the review period, down from 73% in 1999. This is not unexpected, because with income growth, Indians, like consumers elsewhere, have started spending more on non-food items compared with food products. Sales through supermarkets and department stores are small compared with overall retail sales. Nevertheless, their sales have grown much more rapidly, at almost a triple rate (about 30% per year during the review period). This high acceleration in sales through modern retail formats is expected to continue during the next few years, with the rapid growth in numbers of such outlets due to consumer demand and business potential. The Indian retail sector is estimated to have a market size of about $ 180 billion; but the organized sector represents only 2% share of this market. Most of the organized retailing in the country has just started recently, and has been concentrated mainly in the metro cities. India is the last large Asian economy to liberalize its retail sector. In Thailand, more than 40% of all consumer goods are sold through the super markets and departmental stores. A similar phenomenon has swept through all other Asian countries. Organized retailing in India has a huge scope because of the vast market and the growing consciousness of the consumer about product quality and services.

CHAPTER-2
REVIEW OF LITERATURE

The Indian retail sector can be broadly classified into:

a) FOOD RETAILERS There are large number and variety of retailers in the food-retailing sector. Traditional types of retailers, who operate small single-outlet businesses mainly using family labour, dominate this sector .In comparison, super markets account for a small proportion of food sales in India. However the growth rate of super market sales has being significant in recent years because greater numbers of higher income Indians prefer to shop at super markets due to higher standards of hygiene and attractive ambience. b) HEALTH & BEAUTY PRODUCTS With growth in income levels, Indians have started spending more on health and beauty products .Here also small, single-outlet retailers dominate the market .However in recent years, a few retail chains specializing in these products have come into the market. Although these retail chains account for only a small share of the total market , their business is expected to grow significantly in the future due to the growing quality consciousness of buyers for these products . C) CLOTHING & FOOTWEAR Numerous clothing and footwear shops in shopping centers and markets operate all over India. Traditional outlets stock a limited range of cheap and popular items; in contrast, modern clothing and footwear stores have modern products and attractive displays to lure customers. However, with rapid urbanization, and changing patterns of consumer tastes and preferences, it is unlikely that the traditional outlets will survive the test of time. D) HOME FURNITURE & HOUSEHOLD GOODS Small retailers again dominate this sector. Despite the large size of this market, very few large and modern retailers have established specialized stores for these products. However there is considerable potential for the entry or expansion of specialized retail chains in the country.

E) DURABLE GOODS The Indian durable goods sector has seen the entry of a large number of foreign companies during the post liberalization period. A greater variety of consumer electronic items and household appliances became available to the Indian customer. Intense competition among companies to sell their brands provided a strong impetus to the growth for retailers doing business in this sector. F) LEISURE & PERSONAL GOODS Increasing household incomes due to better economic opportunities have encouraged consumer expenditure on leisure and personal goods in the country. There are specialized retailers for each category of products (books, music products, etc.) in this sector. Another prominent feature of this sector is popularity of franchising agreements between established manufacturers and retailers. The organized retail industry is to continue to grow rapidly, especially through increased levels of penetration in larger towns and metros and also as it begins to spread to smaller cities and B class towns. Fuelling this growth is the growth in development of the retail-specific properties and malls. According to the estimates available with Fitch, close to 25mn sq. ft. of retail space is being developed and will be available for occupation over the next 36-48 months. Fitch expects organized retail to capture 15%-20% market share by 2010. A McKinsey report on India says organised retailing would increase the efficiency and Productivity of entire gamut of economic activities, and would help in achieving higher GDP growth. At 6%, the share of employment of retail in India is low, even when compared to Brazil (14%), and Poland (12%). Retailing in India is gradually inching its way toward becoming the next boom industry. The whole concept of shopping has altered in terms of format and consumer buying behavior, ushering in a revolution in shopping in India. Modern retail has entered India as seen in sprawling shopping centres, multi-storeyed malls and huge complexes offer shopping, entertainment and food all under one roof.

The Indian retailing sector is at an inflexion point where the growth of organized retailing and growth in the consumption by the Indian population is going to take a higher growth trajectory. The Indian population is witnessing a significant change in its demographics. A large young working population with median age of 24 years, nuclear families in urban areas, along with increasing workingwomen population and emerging opportunities in the services sector are going to be the key growth drivers of the organized retail sector in India. The retailing industry in India estimated at Rs 9300 billion (2003-04) is expected to grow at 5% p.a. and the organized retailing is well on its way to become a Rs 350 billion market by 2005 according to INDIA RETAIL REPORT 2005 : Study released at the KSA Retail Summit 2005 by Mr Kishore Biyani, managing director of Pantaloon Retail, Indias largest retailer. The size of the organized retailing market stood at Rs 280 billion in 2004, thereby, making up a mere 3% of the total retailing market. Moving forward, organized retailing is projected to grow at the rate of 25%-30% p.a. and is estimated to reach an astounding Rs 1000 billion by 2010. Further, its contribution to total retailing sales is likely to rise to 9% by the end of the decade, said, chairman, KSA Technopak . According to group head, IMAGES & director, International Council of shopping Centres (ICSC - India) and Indian Retail School, currently the fashion sector in India commands a lions share in the countrys organized retail pie. This is in line with the retail evolution in other parts of the world, where fashion led the retail development in the early stages of evolution and was followed by other categories like food & grocery, durables etc

The last few years have seen rapid transformation in many areas and setting scalable and profitable retail models across categories. Indian consumers are rapidly evolving and accepting modern formats overwhelmingly. Retail space is no more a constraint for growth. India is on the radar of global retailers and suppliers/brands worldwide are willing to partner with retailers here. Further, large Indian corporate groups like Tata, Reliance, Raheja, ITC, Bombay Dyeing, Murugappa & Piramal groups etc and also foreign investors and private equity players are firming up plans to identify investment opportunities in the Indian retail sector. The quantum of investments is likely to sky-rocket as the inherent attractiveness of the segment lures more and more investors to earn large profits. Investments into the sector are estimated at Rs 20-25 billion in the next 2-3 years, and over Rs 200 billion by end of 2010.

Stocks in the retail sector are also becoming increasingly attractive from an investors point of view. Successful development of value based concepts as well as development of retail space in smaller cities and towns shall drive the organized retail into the next levels of cities. Retailers have responded to this phenomenon by introducing contemporary retail formats such as hypermarkets and supermarkets in the new pockets of growth. Prominent tier-II cities and towns which are witnessing a pick-up in activity include Surat, Lucknow, Dehradun, Vijaywada, Bhopal, Indore, Vadodara, Coimbatore, Nasik, Bhubaneswar, Varanasi and Ludhiana among others. With consumption in metros already being exploited, manufacturers and retailers of products such as personal computers, mobile phones, automobiles, consumer durables, financial services etc are increasingly targeting consumers in tier II cities and towns. In addition, petro-retailing efforts of petroleum giants scattered through out the countrys landscape have also ensured that smaller towns are also exposed to modern retailing formats. On the supply side, mall development activity in the small towns is also picking up at a rapid pace, thereby, creating quality space for retailers to fulfill their aggressive expansion plans.

Thus, the retail boom, 85% of which has so far been concentrated in the metros is beginning to percolate down to smaller cities and towns. The contribution of these tier-II cities to total organized retailing sales is expected to grow to 20-25%.

The retail sector in India is witnessing a huge revamping exercise as traditional markets make way for new formats such as departmental stores, hypermarkets, supermarkets and specialty stores. Western- malls have begun appearing in metros and second-rung cities alike introducing the Indian consumer to a shopping experience like never before. Rated the fifth most attractive emerging retail market, India is being seen as a potential goldmine. It has been ranked 2nd in a Global Retail Development Index of 30 developing countries. Retail India 2006, shall focus on equipping the retailers with insights on the Indian consumer and strategies for demand creation. Relevant experiences from consumer goods companies, which have successfully crafted an explosion in demand in their sectors, through innovation, consumer driven strategies, will be showcased at the event. Retail experts will share their perspectives to enable a quantum change in the development of modern retailing in India.

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RETAIL FORMATS Different Forms of Retailing : Emergence of new formats of retailing in India POPULAR FORMATS

Hypermarkets Large supermarkets, typically (3,500 - 5,000 sq. ft) Mini supermarkets, typically (1,000 - 2,000 sq. ft) Convenience store, typically (7,50 - 1,000 sq. ft) Discount/shopping list grocer Traditional retailers trying to reinvent by introducing self-service formats as well as value-added services such as credit, free home delivery etc.

Types of General Merchandise Retailers

Discount Stores Specialty Stores Category Specialists Home Improvement Centers Department Stores Drugstores Off-Price retailers Value Retailers

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Non-store Retail Formats

Electronic Retailing Catalog and Direct Mail Direct Selling Television Home Shopping Vending Machines

Mom-and-Pop

Represent the small, individually owned and operated retail outlet. In many cases these are family-run businesses catering to the local community.
Mass

Discounters

These retailers can be either general or specialty merchandisers but either way their main focus is on offering discount pricing. Compared to department stores, mass discounters offer fewer services and lower quality products.

Warehouse

Stores

This is a form of mass discounter that often provides even lower prices than traditional mass discounters. In addition, they often require buyers to make purchases in quantities that are greater than what can be purchased at mass discount stores. These retail outlets provide few services and product selection can be limited. Furthermore, the retail design and layout is as the name suggests, warehouse style, with consumers often selecting products off the ground from the shipping package. Some forms of warehouse stores, called warehouse clubs, require customers purchase memberships in order to gain access to the outlet.

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 Category

Killers

Many major retail chains have taken what were previously narrowly focused, small specialty store concepts and have expanded them to create large specialty stores. These so-called category killers have been found in such specialty areas as electronic (e.g., Best Buy), office supplies (e.g., Staples) and sporting goods (e.g., Sport Authority).

Department

Stores

These retailers are general merchandisers offering mid-to-high quality products and strong level of services, though in most cases these retailers would not fall into the full-service category. While department stores are classified as general merchandisers some carry a more selective product line. For instance, while Sears carries a wide range of products from hardware to cosmetics, Nordstroms focuses their products on clothing and personal care products.
Boutique

This retail format is best represented by a small store carrying very specialized and often high-end merchandise. In many cases a boutique is a full-service retailer following a full-pricing strategy.

Catalog

Retailers

Retailers such as Lands End and LL Bean have built their business by having customers place orders after seeing products that appear in a mailed catalog. Orders are then delivered by a third-party shipper.

E-tailers

Possibly the most publicized retail model to evolve in the last 50 years is the retailer that principally sells via the Internet. There are thousands of online-only retail sellers of which Amazon.com is the most famous. These retailers offer shopping convenience including being open for business all day, every day. Electronic retailers or e-tailers also have the ability to offer a wide selection of product since all they really need in order to attract orders is a picture and description of the product. That is, they may not need to have the product on-hand the way physical stores do. Instead an e-tailer can wait until an order is received from their

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customers before placing their own order with their suppliers. This cuts down significantly on the cost of maintaining products in-stock.

Franchise

A franchise is a form of contractual channel in which one party, the franchisor, controls the business activities of another party, the franchisee. Under these arrangements, an eligible franchisee agrees to pay for the right to use the franchisors business methods and other important business aspects, such as the franchise name. For instance, McDonalds is a well-known franchisor that allows individuals to use the McDonalds name and methods to deliver food to consumers. Payment is usually in the form of a one-time, upfront franchise fee and also on-going percentage of revenue. While the cost to the franchisee may be quite high, this form of retailing offers several advantages including: 1) allowing the franchisee to open a retail outlet that may already be known to local customers, and 2) being trained in how to operate the business, which may allow the franchisee to be successful much faster than if they attempted to start a business on their own. For the franchisor, in addition to added revenue, the franchise model allows for faster expansion since funds needed to expand the business (e.g., acquiring retail space, local advertising) are often supported by the franchisees up-front franchise fee.
Convenience

As the name implies these general merchandise retailers cater to offering customers an easy purchase experience. Convenience is offered in many ways including through easily accessible store locations, small store size that allows for quick shopping, and fast checkout. The product selection offered by these retailers is very limited and pricing can be high.

Vending

Within this category are automated methods for allowing consumers to make purchases and quickly acquire products. While most consumers are well aware of vending machines allowing customers to purchase smaller items, such as beverages and snack food, newer devices are entering the market containing more expensive and bulkier products. These systems require the vending machine have either Internet or telecommunications access to permit purchase using credit cards.

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Economic significance of retailing Sales

Employment Contribution to GDP Top 10 retailers in the world

How Retailers Add Value

Breaking Bulk -Buy it in quantities customers want Holding Inventory -Buy it at a convenient place when you want it Providing Assortment -Buy other products at the same time Offering Services -See it before you buy, get credit, layaway

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CHAPTER 3 PRESENT STUDY

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OBJECTIVE
The objective of the research is to determine the different strategies used by the various Retail formats in the market and to determine the different trends in the Retail sector. Retail sector in India is in the process of big transformation from unorganized to organized retailing, in the light of which there is intense competition among various retail players. And in order to survive the cut throat competition it is necessary for the retailers to come out with new strategies and concepts.

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STRATEGIES

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RETAIL MARKETING STRATEGY

Sales Strategy Advertising Strategy Merchandise Strategy Location Strategy ELEMENTS IN RETAIL STRATEGY Target Market o Customer Needs o Retail Format o Method for Satisfying Needs Bases for Building Sustainable Competitive Advantage Defending Position Against Competitors

Criteria For Selecting A Target Market Attractiveness Large Growing Little Competition More Profits Consistent with Your Competitive Advantages Can A Retailer Develop a Sustainable Competitive Advantage by: Dropping the Price of Your Merchandise? Building a Store at the Best Location? 19

Deciding to Sell Some Hot Merchandise? Increasing Your Level of Advertising?

FINANCIAL STRATEGY

Performance Measures Used by Retailers

Level of Organization

Output

Input
Square feet of store space Number of employees Inventory Advertising expenditures

Productivity (Output/Input)
Return on assets Asset turnover Sales per employee Sales per square foot Gross Margin Return on Investment (GMROI) Inventory turnover Advertising as a percentage of sales * Markdown as a percentage of sales*

Corporate Net sales (measures of entire corporation) Net profits Growth in sales, profits

Merchandise management (measures for a merchandise category)

Net sales

Inventory level

Gross margin Growth in sales

Markdowns Advertising expenses Cost of merchandise

Store operations (measures for a store or department within a store)

Net sales Gross margin Growth in sales

Square feet of selling areas Expenses for utilities Number of sales associates

Net sales per square foot Net sales per sales associate or per selling hour Utility expenses as a percentage of sales *

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Productivity Measures Used by Retailing Organizations

Level of Organization
Corporate (chief executive officer) Merchandising (merchandise

Output
Net profit

Input
Owners equity

Productivity (Output/Input)
Net profit / owners equity = return on owners equity Gross margin / inventory* = manager and Net sales / square foot

Gross margin

Inventory GMROI

buyer) Store operations Net sales (director of stores, store manager)

Square foot

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Human Resource Management

Short Term Increasing Employee Productivity Productivity = Sales/Number of Employees Long-Term Increasing Employee Satisfaction and Reducing Turnover Advantages of Centralized Decision Making Retailers can reduce overhead, i.e. fewer managers Coordinating efforts, it can achieve lower prices from suppliers Opportunity to have the best people making decisions Recruitment & Selection Newspaper advertisements Colleges Existing employees References Recruitment agencies Websites

Training

A need for training arises at the following times:

Inducting new persons/ staff in the Organisations Training for skill enhancements

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Training for sales staff Communication skills Product knowledge Company policies Knowledge of the work place Market awareness Personal grooming

Motivating and Controlling Employees Policies and Supervision Behavior Enforced by Managers Incentives Commission, Bonus

ORGANIZATION CULTURE Unwritten rulesand norms Behavior enforced by social pressure TYPES OF INCENTIVES Commissions on Sales Bonus Stock Options

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MOTIVATING FACTORS The organisation culture Rewards and recognition Monetary benefits Prospects for growth and job enrichment

Incentives Advantages Aligns Employee and Company Goals Strong Motivating Force Disadvantages Employees Only Focus on Sales Less Commitment to Retailer Building Employee Commitment Building Employee Skills Selective hiring Extensive training Empowering Employees Creating Partnering Relationships Reducing Status Differences Promotion From Within Balancing Careers and Families

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Trends in Retail Human Resource Management

Managing Diversity Diversity Training Support Groups and Mentoring Career Development for Promotion

Legal Issues in Human Resources Equal opportunity and anti-discrimination laws Legal rights of a new employee Sexual harassment

Regulations Equal Employment Opportunity Compensation Labor Relations Employee Safety and Health Sexual Harassment Employee Privacy

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Approaches for Building Customer Loyalty

Unique Positioning Customer Service Information About Customers (Database Retailing) Unique Merchandise Location

Basis of Loyalty, Commitment Costs Location Frequent Shopper Programs Unique Merchandise Mental, Emotional Attachment Creating Store Loyalty Mental and Emotional Attachments Elements in a Strong Brand Top of the Mind Awareness Associations with Brand/Store Name Methods Used to Develop a Strong Brand Massive Exposure Symbols to Reinforce Image Consistent Positioning Creating Strong Associations Limited Brand Extensions

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FOUR STRATEGIES YOU CAN CUSTOMERS COMING BACK

1. Under promise, over deliver.

USE

TO

KEEP

YOUR

Although this seems fundamentally simple, the consistent execution is challenging. In our haste to please people and close sales, we often make promises we cant keep. We tell a customer we will deliver by 3:00 P.M. forgetting that we made a similar commitment to several other people. We promise to return a call by the end of the day but get caught up in other tasks and forget. Or, a salesperson tells a client that a back-ordered product will be available on a certain day without first confirming this. These situations end up causing us stress and strain the relationships we have developed with our customers. Avoid these types of problems by thinking through your decision before you make a commitment. 2. Hire the right people. In addition to creating a good working environment, the management team also hired the right people. Front line staff have a tremendous impact on your business. But many managers make the mistake of focusing strictly on technical skills when they interview and hire new employees. Invest the time to hire individuals who have excellent interpersonal skills and who can relate well to other people. Ask questions such as: Tell me about a difficult customer problem you have had to deal with in the past. What would you do if you were faced with this situation? Have you ever had a customer yell at you? How did you respond? You can always teach someone the technical aspect of a job. However, you cannot teach someone to have the right attitude.

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3. Proactive communication. When things go wrong, and in business they often do, it is how you respond that makes a difference. Dont make your customer call you, call them instead. A small local repair shop makes this their policy. When a customer brings an item in for service, they give that person an approximate time frame when the product will be ready. Then they tell the customer, We will call you when it is fixed so you dont have to waste your time checking with us. It is little wonder this business continues to flourish even in a challenging economy. 4. When you make a mistake, apologize.

Most people can accept mistakes, providing they are treated with respect afterwards. This past summer I was inconvenienced on several occasions by different businesses, yet not one bothered to extend an apology to me. In each situation, an apology would have quickly and easily remedied the problem. However, their lack of concern to the problem which was caused by the organization itself caused me to stop doing business with each company. Competition is fierce in every industry. Yet, it is very easy to differentiate yourself from your competition by showing your customers respect. This behaviour starts at the top, with you, the owner or manager. The leader of the business must treat both his customers and employees with respect if he expects his team to take care of the customers. Companies that treat customers with respect will always thrive, as long as they provide a good product or service at a competitive price. Respect your customers time, feelings, opinions, beliefs, and business and they will respect you.

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PRICING STRATEGY Cost Oriented Pricing

Demand Oriented Pricing Competition Oriented Pricing DIFFERENT APPROACHES FOR PRICING STRATEGY Price Lining Market Skimming Market Penetration Leader Pricing Price Bundling Multi Unit Pricing Discount EDLP Odd Pricing

The Gross Margin return on Investment (GMROI)

GMROI helps the buyer in identifying and evaluating the adequacy of gross margins on various products The focus is on return on investment rather than on sales The focus is on SKUs of each individual product Helps in identifying product winners and core products

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Malls In India
Over the last 2-3 years, the Indian consumer market has seen a significant growth in the number of modern-day shopping centers, popularly known as malls. There is an increased demand for quality retail space from a varied segment of large-format retailers and brands, which include food and apparel chains, consumer durables and multiplex operators. Shopping-centre development has attracted real-estate developers and corporate houses across cities in India. As a result, from just 3 malls in 2000, India is all set to have over 220 malls by 2005. Today, the expected demand for quality retail space in 2006 is estimated to be around 40 million square feet. While previously it was the large, organised retailers with their modern, upmarket outlets, and direct consumer interface- who had been a key factor driving the growth of organised retail in the country, now it is the malls which are playing the role. Factors such as availability of physical space, population densities, city planning, and socio-economic parameters have driven the Indian market to evolve, to a certain extent, its own definition of a mall. For example, while a mall in USA is 400,000 to 1 million sq.ft. in size, an Indian version can be anywhere between 80,000 sq.ft. and 500,000 sq.ft. By 2005, total mall space in the 6 cities of Mumbai, Bangalore, Hyderabad, Chennai, Kolkata, and National Capital Region (Delhi, Noida, Gurgaon) is expected to increase to over 21.1 million sq. ft. Compared to other big cities, Kolkata and Hyderabad are relatively new entrants in the mall segment, but are witnessing quick growth. Smaller cities like Pune, Ahmedabad, Lucknow, Ludhiana, Jaipur, Chandigarh and Indore, are also expected to see a formidable growth in the growth of malls in the near future. But malls in India need to have a clear positioning through the development of differential product assortment and differential pricing, in order to compete effectively in a growing mall market. Segmentation in malls, like up-market malls, mid-market malls, etc. , proper planning, correct identification of needs, quality products at lower prices, the right store mix, and the right timing, would ensure the success of the mall revolution in India.

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CHAPTER 4
METHODOLOGY

31

For the research purpose Target audience - the managers which formed the strategies in these retail outlets. The area covered was : Delhi and NCR Region. I visited retail outlets in Delhi and NCR Region. I asked questions with the managers out their. Different Questions asked were as follows 1. How many times in a year do you go for a sale? 2. Is there any fixed number of days for which the sale should be continued? 3. What type of different sales promotions are used by the company in a mall 4. What type of display strategies are used in a mall? 5. Is there any fixed number of food outlets in a mall? 6. What role does the multiplex, plays in increasing the footfall of the mall? 7. What type of special arrangements are done, for handling the traffic during the sale season or the festival days? 8. Out of entertainment, shopping store and the food outlet, whch one id the more profitable one? 9. Which space in retail format is in demand the most? 10. How much is footfall related to the revenue for the store?

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CHAPTER 5
RESULTS

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The responses to these questions were as follows.. Question 1. The different retail malls answered in different ways. E.g. Vishal Mega Mart replied that as such it is not fixed, but one thing was for sure that the sale starts on Friday and goes minimum to minimum till the next Friday. Ebony replied that they go in for sale in month of January and August, means mostly during the change of seasons. Question 2. The Vishal Mega Mart said that the sale is to Occur from the Friday to next Friday, means its important for them that weekend should be there. According to CSM, Noida , there is not a fixed number of days for which the sale is to take place, it actually depends upon the companies who are having their showrooms in the mall. E.g number of days for which LEE will be on Sale will be different from the Woodlands number of days for the sale. Question 3. Vishal Mega Mart uses discount on the items as the biggest tool for the sales promotion. All the items in Vishal Mega Mart are in discount, the minimum being 10% and maximum being 60%. For Ebony , they issue coupons as the tool to promote sales, they even have tieups with different companies, who give their employees the discount coupons. For CSM, they use nearly all the techniques, the go in for discounts, contests, coupons, and also they have collaborations with auto companies, who keep displaying the newer auto cars coming in the market.

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Question 4. For Vishal Mega Mart, the display strategy is that, all the items are very much visible and the customer can actually touch them and can feel them. They provide their customers with trolleys, so that it can be more convenient for the customer to do shopping. They have different sections for garments and FMCG products. The stickers( displaying the discounts) are displayed at nearly all the places for the convenience of the customer. CSM, the display of various Banners is found all over the Mall, the banners of Levis, Nokia are displayed. Also there is a Big Plasma TV at the door step of the Mall, where the different companies put their advertisements e.g. company like whirpool airs its advertisements at the CSM Plasma TV. Question 5 According to CSM, there is not any fixed number of maximum food outlets but minimum of 2 is required atleast in a mall. Also the large the number of outlets, the better it is for the profitability of the Mall. Vishal Mega Mart do not outsource it, they rather their own food outlet. Ebony and Big bazaar does not have the food outlet at all. Question 6. CSM responds it in a positive manner, according to it Multiplex is one of the major reasons for the mall to be popular and it actually increases the footfall for the mall. Also it happens to be a true revenue generator for the Mall. Vishal Mega Mart, Ebony do not have multiplexes. PVR Spice mall is actually famous for the PVR multiplex in it. Question 7. In case of Vishal Mega Mart, they have four security guards at the gate. They have sensor equipped exits, in order to avoid the thefts. They provide their customers with free parking facility.

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For the CSM, the security team of around 10 guards is available at the door steps. Also inside the mall, there are few show rooms which have their own private guards, e.g. Westside etc. all the show rooms are more less equipped with sensor exits. Question 8. In case of CSM , the entertainment is the most profitable business, then at second number is the food outlet, while shopping though profitable but is in the third position. In case of Vishal Mega Mart, the garment business and that especially the mens section is the most profitable. The same goes for Ebony too, the mens section is the most profitable. Question 9. All the retail formats said one thing only that the most in demand is the ground floor and the first floor. Because whoever comes visits these two floors atleast, so the visibility by the consumer is higher in these two floors. Question 10. According to CSM, the footfall is not the true indicator of revenue generation, because most of the people do come for window shopping and to enjoy the ambience of the mall. While Vishal Mega Mart does not have a professional way of determining the linkage between the footfall and the revenue generated. But on talking to the employees came to know that they are planning to start it soon.

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.Retail Summary Chart Below we summarize each retail format by using the seven categorization characteristics. The characteristics identified for each format should be viewed as the most likely case for that format and are not necessarily representative of all retailers that fall into this format. For example, under distribution, clearly most retailers today have an online presence, however, for many the predominant distribution methods is still selling through retail stores Format Mom-andPop Target Market Products Pricing Carried Strategy Promotion Distribution Service Ownership Emphasis Level Structure

mass general competitive advertising stand-alone assorted individually specialty specialty direct mail strip center o/o shopping area Mass mass general discount advertising stand-alone self corp. chain Discounter strip-center Warehouse mass general discount advertising stand-alone self corp. chain Store Category mass specialty discount advertising stand-alone assorted corp. chain Killler competitive strip center Department specialty general competitve advertising shopping assorted corp. chain Store area shopping mail Boutique speciatly specialty full selling stand-alone full individuallly exclusive strip center o/o shopping chain area Catalog mass general discount direct mail direct assorted corp. specialty specialty competitive marketer structure e-tailer mass general discount advertising online seller self corp. specialty specialty competitive structure full Franchise mass specialty competitive advertising stand-along assorted contractual strip center Convenience mass general full advertising stand-alone self individually o/o corp. chain Vending mass specialty full none vending self corp. structure

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NCR/Delhi Current Retail Scenario

The retail sector in Delhi/NCR is witnessing a huge revamping exercise with traditional markets making way for new, organized retailing formats like departmental stores, hypermarkets, supermarkets and specialty stores. By end-2007, NCR region is expected to witness an influx of about 19.5 mn.sq.ft. of additional mall space. This will result in a cumulative stock of 23.2 mn.sq.ft. as against 3.7 mn.sq.ft. available presently. Of the total space being developed in the NCR and its surroundings, Gurgaon and Noida will account for 35% of the additional retail space by 2007. Land auctioning by DDA & MCD in prime residential and upcoming retail locations in Delhi has released new space for mall developments. Currently, only about 0.36 mn.sq.ft. of land is under new format retail activity in Delhi. A total of 31 new malls have been proposed that will add up to an estimated 6.0 mn.sq.ft. of organized retail space by 2007. Ansal Plaza is, till date, the only operational mall in Delhi and continues to attract high lease rentals of Rs.250-300/sq.ft. per month. The concept of destination shopping still remains popular in Delhi with Connaught Place and South Delhi (Greater Kailash, South Extension & Lajpat Nagar) still being the hub of retail activity. Rentals in these locations range from Rs.125-300/sq.ft. per month, depending on location, visibility and size. brought about an increase in income for the 20-25 year age group and this has altered the expenditure and consumption patterns in the city. Malls have emerged as a preferred development option for property developers due to better returns on their real estate investment. Also, mixed-use developments ensure better land use, diversification of risks and better rates for adjoining residential and commercial developments. MMR will have an estimated 20 mn.sq.ft. of total retail space by end-2007. With such quantum of new format retail space in the pipeline, innovation, striking the right tenant mix, effective mall management and provision of ample parking space are components that will decide the future success of mall developments. With approximately 15 mn.sq.ft. on new retail space on the anvil, the demand for new retail space is equally strong with most retail chains like Pantaloons and Shoppers' Stop having aggressive expansion plans.

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Hypermarkets have emerged as the biggest crowd pullers due to the fact that regular repeat purchases are a norm at such outlets. The lifestyle of the city residents directly affects the retail scenario in the city. In a fast paced city like Mumbai, we foresee the emergence of a new generation of professionals with changing tastes and preferences. The new generation of consumers is increasingly becoming more discerning towards brands and this is promising for the organized retail industry. Distribution of current retail space in NCR Gurgaon Delhi Faridabad Ghaziabad Noida Greater Noida Total space : 43% 10% 11% 21% 13% 2% 3.7 mn.sq.ft.

Large format retail space is not readily available in Connaught Place, South Extension, Greater Kailash and no new malls are being planned in these locations. North West Delhi is also undergoing considerable change in retail activity. By the year 2006, locations like Rohini, Pitampura, Shalimar Bagh and Rajouri Garden would witness an influx of over 2.0 mn.sq.ft. of additional retail space. Emerging retail pockets of South Delhi like Saket and Vasant Kunj are also witnessing substantial retail activity with a number of new developments being planned by real estate developers like Sun City and the DLF Group. DLF Group has proposed a 0.95 mn.sq.ft. mall in Vasant Kunj that will house an 11-screen multiplex besides having retail and F&B segments. Unitech, in a joint venture with Appu Ghar, is developing the 0.50 mn.sq.ft. Rohini Amusement Complex which will be ready by 2007. The complex is proposed to have a retail component together with recreational facilities. In the recent times, Gurgaon has seen rapid real estate development (commercial, retail and residential) chiefly on account of ready availability of comparatively cheaper land, increased job creation and good a

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catchment of upwardly mobile population. Gurgaons retail real estate supply, which currently stands at approximately 1.6 mn.sq.ft., is expected to reach approximately 5.6 mn.sq.ft. by end-2007. The completion of new malls like DLF Mega Mall (275,000 sq.ft.), Gold Souk (180,000 sq.ft.), Regent Plaza (75,000 sq.ft.), and Galaxy Mall (80,000 sq.ft.) added a total of 0.60 mn.sq.ft. to the existing retail stock in 2004. Presently, Gurgaon has 8 malls that are operational. With more than 15 new malls coming onto the market, Gurgaon will account for 24% of the total 23.2 mn.sq.ft. of retail stock slated to be in NCR market by end2007. Over 70% of the space in the upcoming malls has already been leased out to retailers. Noida is forecasted to see an exponential growth with the mall market increasing in size from the current 0.5 mn.sq.ft. to 2.5 mn.sq.ft. by end-2007. With 5 new malls entering the market, Noida will take up 11% of the total new retail space scheduled to be in the NCR region by end-2007. The prime areas in Sector-18 command rentals of Rs.100-150/sq.ft. per month. The sale prices range between Rs.8,000-15,000/sq.ft. Other individual sector markets like Sector-27 & 29 have also been doing prolific retail business. The rentals in these sectors range from Rs.20-35/sq.ft. per month (Grade-B properties) to Rs.55-80/sq.ft. per month (Grade-A properties). Unitech, in a joint venture with Appu Ghar is developing an amusement park spread across 140 acres in Noida. The park will also have the Unitech Mall, which will be a 1.3 mn.sq.ft. development. Greater Noida, Faridabad, and Ghaziabad together will have 40% of the total retail space predicted to be added in the NCR region by the end of 2007. With the Commonwealth Games scheduled to be held in Greater Noida in the year 2010, tremendous construction activity is underway in this micro-market. From the present 0.06 mn.sq.ft., a cumulative 3.8 mn.sq.ft. of retail space is slated to be available in this market by end-2007. High street retail lease rentals in Delhi GK I & II South Extension Connaught Place Rajouri Garden Lajpat Nagar Vasant Lok

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Presently, Faridabad has only three malls namely, Ansal Plaza, SRS World, and Destination Point, which occupy 0.4 mn.sq.ft. of space. By the end of 2007, it is predicted that Faridabad will have 8 malls occupying 1.2 mn.sq.ft. of retail space. Faridabad is going to house 7% of the total retail development in Delhi/NCR by 2007. Ghaziabad, which currently has about 0.8 mn.sq.ft. of new format retail space, has 9 upcoming malls which will total to approximately 3.6 mn.sq.ft. of retail space by 2007. Due to reasonable real estate costs, availability of land and low cost labour, developers are now moving to Ghaziabad and it will have 16% of the additional retail space predicted for the entire Delhi/NCR market by end-2007. Rentals in Ghaziabad high street are around Rs.30/sq.ft. per month whereas in malls it is as high as Rs.50/sq.ft. per month. With more than 75 malls (total stock of 23.2 mn sq.ft.) slated to in the Delhi/NCR market by 2007, the developers are vying to differentiate their malls on the basis of product mix. Amusement parks, convention centers, service apartments and hotels are some concepts which are being combined with retail to present a complete product offering. Noida is forecasted to witness a dynamic retail market with demand being fueled both by Delhi as well as Noida residents. Malls are expected to do well in Noida on account of its proximity and better connectivity to Delhi. Faridabad, Greater Noida and Ghaziabad are together going to have 25 malls by the end-2007, thus lowering the gap between demand and supply. The rentals are expected to be stable till all the new malls become operational. High street retail in places like South Extension, Connaught Place, Greater Kailash, Vasant Kunj, etc., would continue to command high prices due to lack of fresh supply. However, some micro-markets like Defence Colony will have addition to the existing stock. A new trend of developing larger format malls (over 300,000 sq.ft.) will catch up with the new mall developers and promoters. Kaushambi Mall (500,000 sq.ft.)

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Distribution of retail space in NCR by 2007 Ghaziabad 16% Gurgaon 24% Noida 11% Faridabad 7% Delhi 25% Greater Noida 17% Total space : 23.2 mn.sq.ft. Sahara Mall, Gurgaon Yearly addition of mall space in NCR micro-markets Gurgaon Delhi Faridabad Ghaziabad Noida Greater Noida . Delhi presently is witnessing growth of hypermarkets like Vishal Megamart, Giant's, etc., which are large sized retail formats offering all kinds of products under one roof. Buyers find them attractive because they sell products at heavy discounts. Hypermarkets are able to offer these reduced prices as they source their supply in bulk directly from the manufacturer. It is expected that as retail markets mature, real estate developers would enter into revenue sharing arrangements instead of fixed rentals with retailers to increase the occupancy of their malls, share the risk of operations and also benefit from positive consumer response.

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CHAPTER 6
DISCUSSIONS

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The EST model In order to ensure that their businesses and market shares are not sucked into a black hole, retailers need to chalk out their strategies and adopt the EST model most closely aligned to their core competencies. This model takes a number of factors into account, as detailed below. CheapEST: Low price
This is the adoption of the pricing strategy as a clear differentiator with regards to the competition. It is easier said than done, and requires clear visibility and control over cost components in the supply chain, merchandising operations and store operations. Some retailers who have adopted this model are Wal-Mart, Carrefour and PriceLine.

BiggEST: Selection, variety Home Depot and Amazon are examples of retailers who offer this value proposition to customers. They both offer a deep range and have clearly distinguished themselves from the competition as the ones having the largest selection and variety in the categories they deal in. HottEST: Fashion Apparel retailer ZARA has clearly established itself as having an eye for the trendiest and hottest in the fashion world. This, coupled with its pricing strategy, sets it apart from the rest of the players. QuickEST: speed and service If your wait in the queue exceeds five minutes, then your order is freethis promise by McDonalds to its customers helped it become the largest fast-food chain in the world. Adoption of the EST has to be complemented by stringent productivity measures, and controls in internal and external processes.

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PANTALOON vs WESTSIDE
Both opted for the large format retail outlet route. Now the differences. At present, Kishore Biyani's Pantaloons is four times the size of the Tata Group-owned Trent (sales turnover 2003-04). It occupies eight times more retail space than Trent's Westside. And for every Westside outlet in the country, there are nearly four owned by Pantaloons. "Retailing is like riding a bicycle, you can't stop pedalling," Biyani, who is the managing director of Pantaloons Retail. And even as the first-generation businessman pedals at Olympic speeds, the Tatas have stuck to their soft strategy, be it setting up new stores or entering new locations. The organised retail industry in India is worth Rs 900 crore (Rs 9 billion) and counting. Who will win the race to be No 1? Will Pantaloons' size breast the tape or can Trent's cautious optimism survive the distance? Margin for error? Do the numbers indicated in "Bare facts" mean that Pantaloons wins the war even before battlelines are drawn? Not quite. According to industry experts, as players keep adding floorspace, expansion has little meaning if the revenue per square foot added falls with every foot added. In 2003, with a floor space of 210,000 sq ft, Westside earned a revenue of Rs 50 a sq ft. Currently with a marginal increase in floor space to 220,000 sq ft, it earns Rs 70 a sq ft. On the other hand, Pantaloons' revenue per sq ft has declined from roughly Rs 76.7 to Rs 59 in 2004, while floor space has increased from 580,000 sq ft to 11 lakh (1.1 million) sq ft. That's where the margin game comes into play. Westside was the first to recognise the advantage of in-house labels. What's the advantage? Better margins, for starters. Private labels earn gross margins of 25 to 30 per cent, compared with 5 to 15 per cent for branded apparel. Besides, the store has better control on the brands and design and can develop unique positioning for in-house brands.

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Westside's leveraged its private labels well, appealing to more sophisticated, urban customers, compared to Pantaloons, which was bogged down for several years by its middle-class, budget store image (that's changed now, though). Realising the importance of in-house labels, even Pantaloons has scaled up the number of in-house labels from 20 to 40-odd private labels currently. In contrast, almost all the brands sold at Westside are in-house, private labels. Which means the chain has better margins, and therefore better revenues, per label.The impact on operating profit margins is visible. Trent's OPMs have improved to 15.18 per cent in FY2004 from 13.27 per cent the previous year. In comparison, Pantaloons' OPMs have remained sticky at 8.41 per cent in FY2004 from 8.17 per cent in FY2003. The implication is clear: higher OPMs mean the chain is managing costs well and is better placed to build reserves, which will help future expansion. But, says Arvind Singhal, managing director of retail consultancy KSA Technopak, margins may vary because of the nature of business. He adds that it is the stock turnover that should be the benchmark of superiority. If that's the parameter, Pantaloons leads marginally: it has a stock turnover of five compared to four for Trent. Gain an extra inch According to K K Iyer, partner at management consultancy Accenture, being the first mover in new markets has its own advantages. The biggest plus is in grabbing the hot seat as far as property is concerned. Once a store enters a good catchment area, its competition loses that advantage. When Westside first entered Mumbai in 2000, it opened shop in elite south Mumbai. At the time, the suburbs were ruled out because Shoppers' Stop cast a long shadow over the western suburbs. And even when Westside finally moved northwards into Andheri (where the first Shoppers' Stop outlet is located. In 2001, Pantaloons' marketing and promotion costs were 3.34 per cent of sales. As the number of outlets went up from around 20 in 2002 to 44 in 2003, the chain's spends on advertising and promotions were down to 2.84 per cent of total income in 2004. In comparison, Trent advertising and promotion spends were 11.4 per cent of total income in 2004, compared to 12.3 per cent in 2003, for a relatively smaller scale of operations.

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Too much, too soon? Are Trent and Pantaloons growing too fast? "When you grow rapidly, there is a small risk of over-extension." For instance, it becomes difficult to manage manpower to ensure that quality employees are present in all stores. And it's not just about good front-end staff: expansion, especially in the multiple format model preferred by Pantaloons, has to be accompanied by adequate depth and width of a core management team. "Pantaloons, as it rolled out, has visibly beefed up a senior management team. Trent, however, has more or less stuck to a core team," says a competitor. From a completely top-driven approach, it has delegated the management of categories and formats to professionals. Also, of the two, it is Trent that is tightening its belt on employee costs. Which is important, considering even mammoth departmental store chains like the 8 billion Marks & Spencer has stabilized its employee costs at 7 per cent of its total revenues. Trent spent 6 per cent of its turnover on employee costs (the figure hasn't changed for two years, even though the number of stores has increased from eight to 17). On the other hand, Pantaloons' employee costs as a percentage of total income have gone up from roughly 3 per cent in 2001 to 4.17 per cent in 2004. That's not too much, especially if you consider that the number of employees has doubled in FY 2004 to 3,500, from 1,700 in 2003. (By April 2005, Pantaloons had close to 6,000 employees, mostly at the front end.). Multiple formats Do multiple formats have a clear advantage for Pantaloons? If margins from apparel sales in Pantaloons (the lifestyle store) suffer, the company does have the option of moving stock to the discount store, Big Bazaar. Moreover, losses in margins in one category can be absorbed by profits in another. Trent, too, has recognised the advantage of multiple formats. In end 2004, it launched Star India Bazaar, a 50,000 sq ft hypermarket in Ahmedabad.

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How does the stock market rate the strategies of the two players? Since 2002, Pantaloons' share price has moved from Rs 30 to Rs 882 (April 25, 2005) currently. Over the same period, Trent has climbed from Rs 71 to Rs 580.95. "Pantaloons' high reliance on debt to finance its growth remains a cause of concern. Pantaloons' debt-equity ratio was 1.86 as of 2003-04, compared to 2.17 in 200203. Trent's debt-equity ratio has remained fairly stable at 0.001 per cent in the same period. Consultants refuse to give their verdict on which player will be strongest in the long run. As Biyani himself admits, "There is no ideal retailing strategy to follow." The big debate in retailing circles these days concerns formats that can work in the marketplace. India has seen the emergence of retail along the lines of the hypermarket (Big Bazaar, Spencers, Star India Bazaar), supermarket (Subhiksha, Haiko in Mumbai, Sabka Bazaar, FoodWorld), department store (Shoppers Stop, Piramyd, Lifestyle), speciality store (Provogue, Adidas, Reebok, all branded outlets) and convenience store (Reliance petrol retail outlets). But whats making business sense at the moment are the larger formats such as hypermarkets and department stores. For a hypermarket, where the overall investment is lower than a department store, whose accent is on experience rather than discount shopping, the capital to output ratio is better, says , chief executive officer, Piramyd Worldwide, hypermarkets are a successful format as opposed to department stores, which are only doing well in Japan and South East Asian countries such as South Korea, Singapore and Malaysia. However, value-for-money shopping, which, according to analysts, is more about affordable pricing of products as opposed to offering discounts on the maximum retail price is a hit abroad. We see this format picking up in the country, says Chennai-based Lifestyle International, which has nine stores (including eight department stores) in six cities taking its overall retail space to 4.5 lakh square feet. The company, backed by the Dubai-based Landmark Group, is looking at exclusive value stores, hypermarkets, brand stores in addition to speciality stores targeting the home products, furniture and furnishings segment. The home segment is a big area for retailers and we have ade a start with our Home Centre in Gurgaon. Pantaloons subsidiary Home Solutions Retail already has a presence in the home segment with its Mela outlet in Mumbai.

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If Lifestyle is now eyeing the value segment, Delhi-based Vishal Mega Mart, a hypermarket chain, is well-entrenched in the space with its affordable range of clothing and allied products, all produced in-house. Says , managing director, Vishal Mega Mart, Our USP is that we offer fresh products at seconds (economical, that is) pricing. With a turnover of Rs 89 crore, the chain has 14 stores spread across 1.85 lakh square feet of space in 10 cities. Most of the products are sourced directly from manufacturers around the country and internationally. A lot of the garments, on the other hand, are manufactured at our facility in Gurgaon. Meanwhile Subhiksha, the Chennai-based supermarket chain, which has a string of 1,500 square feet neighbourhood grocery stores, views discounts on food products as a big driver for its business. The company, which has 145 outlets, closed the last financial year at Rs 278 crore up from Rs 100 crore in 2001-02. Investment in an outlet is roughly Rs 25 lakh, says R Subramanian, managing director, Subhiksha. However, if the stores are too close to each other it can hit the revenue potential of the outlets.

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SIGNIFICANT RETAIL TRENDS IN INDIA

Constant change new formats. Professional management. Technology. Rise of extremes mass merchandisers / specialty stores / category killers. Growth of franchising , leading to a global presence. Retail establishments are gradually tnspend more time

The following are some of the significant trends in the Indian retail industry:

RAPIDLY CHANGING CUSTOMER BEHAVIOUR

From the early 1990s, the scenario in India was beginning to change. This change was coming from two sources. First, the manufacturers, lured by the almost proverbial 200 million strong Indian middle class, were continually adding to the range of products in the marketplace. Among the faster moving consumer goods, while there were 57 core categories in India in 1990, an additional 19 had entered the market by 1996 and the final figure stands at about 150+ as of now. These new categories contributed to about 2500 brands and about 5000 stock keeping units (SKUs). As the manufacturers produced more and more products and variants, focused on the specific needs of more clearly segmented consumers, the shopkeepers ability to manage his small shop was becoming increasingly complex. Over the years, the increasing literacy in the Country and the exposure to developed nations via satellite television or by way of the overseas work experiences, the consumer awareness has increased on the quality and the price of the products/services that is expected. Today more and more consumers are vocal on the quality of the products/services that they expect from the market. This awareness has made the consumer seek more and more reliable sources for purchases and hence the logical shift to purchases from the organized retail chains that has a corporate background and where the accountability is more pronounced. The consumer also seeks to purchase from a place where his/her feedback is more valued.

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Indian customers are now more aware and discerning, had been exposed for some years to a rapidly proliferating media, and were beginning to demand benefits beyond just availability of a range of products that came from trusted manufacturers. In a retailing context this change in consumer consciousness is reflected in their desire for: 1. the opportunity to see, evaluate and buy from a large assortment of products at one location; 2. a shopping experience, which is pleasurable, and if possible, even exciting; and 3. a shopping experience that is inexpensive, well presented and durable In other words, the Indian consumer is beginning to accept shopping to be a pleasurable experience, but is unwilling to pay a price premium.

EMERGENCE OF DISCOUNT STORES

In 2002-03, Indians in some cities got the taste of discount stores for the first time. Thanks to discount stores, the local kirana stores are under pressure and consumers are getting increasingly aware of the advantages of buying in bulk at higher discounts. With perhaps every item of daily use available at the discount stores like Big Bazaar and that too at wholesale prices, consumers easily accepted this format over local kirana stores. The discount stores emerged as class-less stores with consumers of all incomelevels shopping at these stores. We expect that there will be rapid expansion of discount stores to tier-2 and tier-3 cities and your company is already experimenting in them. The growth opportunities are highest there.

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THE FACTORS RESPONSIBLE FOR THE DEVELOPMENT OF THE RETAIL SECTOR IN INDIA CAN BE BROADLY SUMMARIZED AS FOLLOWS: Rising incomes and improvements in infrastructure are enlarging consumer markets and accelerating the convergence of consumer tastes. Looking at income classification, the National Council of Applied Economic Research (NCAER) classified approximately 50% of the Indian population as low income in 1994- 95; this is expected to decline to 17.8% by 200607. Liberalization of the Indian economy which has led to the opening up of the market for consumer goods has helped the MNC brands like Kellogs, Unilever, Nestle, etc. to make significant inroads into the vast consumer market by offering a wide range of choices to the Indian consumers. Shift in consumer demand to foreign brands like McDonalds, Sony, Panasonic, etc. The internet revolution is making the Indian consumer more accessible to the growing influences of domestic and foreign retail chains. Reach of satellite T.V. channels is helping in creating awareness about global products for local markets. About 47% of Indias population is under the age of 20; and this will increase to 55% by 2015. This young population, which is technology-savvy, watch more than 50 TV satellite channels, and display the highest propensity to spend, will immensely contribute to the growth of the retail sector in the country. As India continues to get strongly integrated with the world economy riding the waves of globalization, the retail sector is bound to take big leaps in the years to come.

Favorable demographic and psychographic changes relating to Indias consumer class, international exposure, availability of increasing quality retail space, wider availability of products and brand communication are some of the factors that are driving the retail in India. Over the last few years, many international retailers have entered the Indian market on the strength of rising affluence levels of the young Indian population along with the heightened awareness of global brands and international shopping experiences and the increased availability of retail 52

real estate space. Development of India as a sourcing hub shall further make India as an attractive retail opportunity for the global retailers. Retailers like WalMart, GAP, Tesco, JC Penney, H&M, Karstadt-Quelle etc stepping up their sourcing requirements from India and moving from third-party buying offices to establishing their own wholly owned/wholly managed sourcing & buying offices shall further make India as n attractive retail opportunity for the global players.

Challenges of Retailing in India

Retailing as an industry in India has still a long way to go. To become a truly flourishing industry, retailing needs to cross the following hurdles: Automatic approval is not allowed for foreign investment in retail. Regulations restricting real estate purchases, and cumbersome local laws. Taxation, which favours small retail businesses. Absence of developed supply chain and integrated IT management. Lack of trained work force. Low skill level for retailing management. Intrinsic complexity of retailing rapid price changes, constant threat of product obsolescence and low margins.

The retailers in India have to learn both the art and science of retailing by closely following how retailers in other parts of the world are organizing, managing, and coping up with new challenges in an ever-changing marketplace. Indian retailers must use innovative retail formats to enhance shopping experience, and try to understand the regional variations in consumer attitudes to retailing. Retail marketing efforts have to improve in the country - advertising, promotions, and campaigns to attract customers; building loyalty by identifying regular shoppers and offering benefits to them; efficiently managing high-value customers; and monitoring customer needs constantly, are some of the aspects which Indian retailers need to focus upon on a more pro-active basis. Despite the presence of the basic ingredients required for growth of the retail industry in India, it still faces substantial hurdles that will retard and inhibit its growth in the future. One of the key impediments is the lack of FDI status. This 53

has largely limited capital investments in supply chain infrastructure, which is a key for development and growth of food retailing and has also constrained access to world-class retail practices. Multiplicity and complexity of taxes, lack of proper infrastructure and relatively high cost of real estate are the other impediments to the growth of retailing. While the industry and the government are trying to remove many of these hurdles, some of the roadblocks will remain and will continue to affect the smooth growth of this industry. Organized retailing in India is gaining wider acceptance. The development of the organized retail sector, during the last decade, has begun to change the face of retailing, especially, in the major metros of the country. Experiences in the developed and developing countries prove that performance of organised retail is strongly linked to the performance of the economy as a whole. This is mainly on account of the reach and penetration of this business and its scientific approach in dealing with customers and their needs.

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RETAIL: GOING BEYOND SURVIVAL

Globalisation is the buzzword in todays retail market. This is evidenced by the fact that a few large retailers control global markets. Wal-Mart, the largest retailer in the world, now has operations in 11 countries, with multiple formats, and is growing rapidly. Increasingly, the world of retailing is becoming Wal-Marts world.

Consolidation Consolidation and retrenchment are inevitable as department-store market shares continue to decline. Department stores are caught between escalating competition from mass-channel, lifestyle-focused specialty retailers and category-killer superstores. Supermarkets are expanding their one-stop shopping appeal with the addition of fuel pumps, more non-food items and mealtime options (often in partnership with other retailers) in order to become the new convenience store, or at least a more convenient store. In essence, the lines between the different formats are fast disappearing and the emphasis is now on consolidation. Diversification Consumer ecosystems are the emerging trend. These ecosystems address the inter-related requirements of consumers for speed and efficiency; they also provide retailers with the opportunity for growth. Retailers are using their negative working capital scenario (on account of cash sales and deferred supplier payments) to get into finance, banking and insurance services. In effect, what we are witnessing is Darwinism in the retail industry; this is a concern for all players, large and small. Large retailers like Wal-Mart are putting smaller retailers out of business through multiple formats, a larger range of merchandise, lower prices, and consistent enhancement of the customers overall retail experience. Driving prices down is the key to Wal-Marts success. They achieve this through a passion for cutting down costs in all aspects of the business. This is referred to as the EST model for growth and overall dominance of the retail industry, the CPG manufacturers and various suppliers. Lets take a closer look at this model.

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PROCESSES Internal processes refer to processes within the four walls of the retailer in terms of operations management, merchandising strategy, cost reductions, pricing discipline, human resources and financials. External processes are focused towards integrating operations between manufacturers, suppliers and retailers to bring about cost reductions and better visibility throughout the retail supply chain through inter-firm collaboration. Before we explore some of the productivity measures that can help retailers survive and grow, let us understand productivity and why it needs to be measured What is productivity? Simply put, productivity means quantifiable output derived from the application of a quantifiable resource or input for a unit of time. To increase productivity one has to increase the output derived from the same input or get the same output with decreased input. More for lessthat is what retailing is all about now. Consumers want more variety, more payment options, more convenience and more servicebut at reduced prices. Higher productivity and its consistent increase not only ensures survival but also creates opportunities for growth. Why measure productivity? In this era of more for less, the only way to really survive is to increase productivity, and to increase productivity you have to measure it. To elaborate, what gets measured gets changed. In order to bring about any change, it is necessary to know what the current metrics are, and then compare them with the past. Having a map and not knowing your current position on it will not really help. What gets rewarded gets done. If you do not measure it, you cannot change it, and if you do not reward change, it will not happen. Also, if the rate of change outside exceeds the rate of change inside your company, disaster is imminent.

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What should be measured? There are quite a few things that retailers need to continually measure, monitor, report and improve on. Some of them are

Average transaction value and spend range analysis. Items per receipt. Conversion rate. GMROII.

The average transaction value, items per receipt and conversion rate, if monitored, tracked and rewarded, can bring about an increase in sales and profits of at least 15 percent. Average transaction value The average transaction value is calculated by dividing the total revenues of a store by the total number of receipts. It gives retailers an understanding of how much the average customer spends in their stores. It is a critical indicator, and gives an idea of how retailers could sell more to customers they already have. Promotions and pricing strategies need to be aligned with these average numbers to increase the average basket-spend in the store. An example of how average transaction value and spend range analysis can be used profitably is as follows. Items per receipt Items per receipt is a measure obtained by dividing the total number of items sold by the total number of receipts. This gives an indication of how many items the average customer purchases. It is highly co-related to the performance of suggestion and add-on selling. Suggestions or add-on selling are definitely easier to do during the holiday season. It is possibly the best time of the year to maximise every sale. Retailers need to make their shop floor and customer service assistants aware that they have an advantage; the shoppers walking into the store are not just looking they are looking to buy. What they dont know is how much they will buy. Adding on doesnt take much time. If a customer has selected a sweater for his sister, it takes virtually no additional time for a sales person to suggest a perfectly coordinated scarf or a really wild pair of earrings to enhance the look of the sweater. And no one should be allowed to sell a pair of shoes without suggesting that the customer buy a tin of shoe polish or a matching pair of socks.

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As busy as it may get, retailers should never miss the opportunity to make the most of every sale by adding on. These add-on sales must be measured, tracked and rewarded by store, sales person and/or cashier.

Conversion rate The conversion rate, also known as the conversion ratio, basically represents the number of customers that make a purchase out of every 100 that walk into the store. Whilst footfall represents the retailers ability to draw potential customers into the store, the conversion ratio measures how well he converts shoppers to buyers. Higher conversion ratios translate into higher sales. While footfall can be attributed to various marketing activities, the actual conversion ratios depend on various factors like merchandise range, pricing, promotions, display, store layout, suggestive selling, service and product availability. This key measure, if monitored, tracked, analysed and acted upon, has the potential to deliver significant growth in sales and profits. An example follows. GMROII GMROII (Gross Margin Return On Inventory Investment) measures how effectively the money allocated for inventories is invested. It is the only return on investment (RoI) formula to show returns as a currency value and not as a percentage, so its importance to retailers cannot be overstressed. GMROII is often used to compare the performance of different categories for a retailer. The buyers are allocated money for purchasing stock, and the money spent is measured against the returns they have achieved on this investment. It effectively translates into identifying the returns on every dollar invested in inventories. GMROII can be computed by dividing the gross margin value by the average inventory value (stock on hand) at cost. It is very sensitive to inventory turns and the gross margin. It helps in

Identifying profitable categories. Identifying problem categories. Making comparisons between categories. The allocation and management of open-to-buy budgets.

GMROII figures, when compared across stores of a retailer, also give valuable insights into potential areas of improvement in store operations, staffing and employee productivity. So while Darwinism is really at play on the global scene, there are still opportunities for retailers to not only survive but actually grow. They need to constantly improve in key areas by constant monitoring and measurement. They

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have to set realistic targets, measure productivity, and provide the right systems to bring about improvements in the same. The author is practice head, Retail, at Zensar Technologies. He has extensive experience planning and executing domain-led technology solutions for large and medium-size companies in the retail, pharmaceutical and CPG industries. The problem with Wal-mart is that they truly have colossal resources and when they make up their mind to enter a market, they do so with gusto. Add to that their unbelievably large buying power which drives their costs so low and allows them to sell everything at rock-bottom prices and you have a very formidable opponent for the local folks. That said, there are strategies that can be employed against them. You can look at Target as an example. OK, I know Target is not a "mom & pop" store, but they are competing with Wal-mart and the reason I think their strategy is effective is that they are still in the game (Wal-mart competitors usually don't last long unless they are doing something right). In Target's case, they have focused on retaining their customer base as much as possible and have raised the bar on Wal-mart's "always the lowest price" strategy by focusing on Design and Brands, which may be a little more expensive than Wal-mart's, but which are also more fashionable. Target's advertising is always fresh, always cutting edge and has a very "feel-good", as well as "design you can afford" quality to it. I think the local merchants in India could adopt a similar attitude and undertake as massive a campaign as they can muster to show their clientale what differentiates them from Wal-mart and why the customers should remain loyal to them. Make no mistake, some people will be drawn to "always the lowest price". However the acid test is to see how many customers will resist the siren song and stick with the local merchants.

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FDI IN RETAIL SECTOR

Despite being one of the largest employing industries in India and contributing a significant portion to GDP, it still lacks a clear policy which would allow Indian retail players to firmly establish themselves and enable them to face competition on an equal footing. . The issue is foreign direct investment (FDI) in retail; there are concerns that it will create monopolies. Demand impetus should be created through a single market and uniform taxes. Indian retailing industry has made huge strides over the last 10 years. The retail trade in India is expanding by 22 per cent per annum with addition of 25 million middle class customers. Despite the recent boom in the retail sector in India, organized retail forms only around 3 per cent of the entire industry. Despite being one of the largest employing industries in India and contributing a significant portion to GDP, it still lacks a clear policy which would allow Indian retail players to firmly establish themselves and enable them to face competition on an equal footing. With heightened activity in the retail scenario the debate over whether FDI in the sector should be allowed or not is getting heated. Here there are two issues which are getting entwined. The first is the question of the benefits of organized retail, and the second is allowing FDI in the retail sector. There is no doubt that organized retail sector holds a number of benefits. The entry of the organized sector in retail trade is capable of mitigating, if not solving, the huge waste involved in the current system, simultaneously paying better prices to the producer and lower prices for the consumer. The recent arguments in favour of allowing FDI into the retail sector all pertain to organizing the retail sector. There is no argument to support FDI over investments by Indian retail players. Here the advocates of FDI in the sector need to understand that the social commitment which will come from local industry naturally will be absent in foreign companies entering the market. Foreign players might give in on some issues under pressure from the government but there overriding factor for all decisions will be the bottom-line. Organizing the retail sector is the need of the hour. But it has to be understood that change will bring with it a lot of upheaval and teething problems. The local retail playerslarge as well as small, need to be given support and time to adjust to changed environment. To bring in FDI at this hour will be an error of judgment, as it will not bring any significant benefit to the country. Investment bought in through FDI in retail will find its way back to the country of origin.

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Commerce and Industry Minister stated recently that, More investment has to flow into the retail sector, but it has to be seen whether the investment should be domestic or foreign, he said. He stated that the sector would be opened up only if labour was not displaced or replaced. The minister added that the government was studying the matter closely as Thailand had also faced serious problems with FDI in retail. The Left has been extremely vocal in its opposition to FDI in retail. They have also stated that they are not opposed to FDI, but bringing in FDI into the retail sector does not make any sense. Besides opposition from the Left and BJP, local retail groups like Pantaloon and RPG are strongly opposed to the idea. Their argument is that the Indian retail sector in the organized sphere is still in a nascent stage. It should be given policy support and time by the government to establish itself firmly. Indian industry is amongst the best in the world and is competing with the best in the world in various fields. In the retail sector, the local industry and big financial houses need to be allowed time to step up their retail plans and create enough barriers before the competition hits the shelves. A position paper prepared by the national retail committee of the Confederation of Indian Industry (CII) has said that FDI should be gradually allowed first in relatively less sensitive sectors. The paper argues that checks should be injected to ensure overall growth of the domestic retail industry and to create a level playing field. CII has stated that the domestic retailers will need at least a few years time for the kind of capital formation that is required for their growth and development. Foreign players could displace the unorganized retailers because of their superior or financial muscle and induce unfair trade activities such as predatory pricing. The local retail industry should be allowed time and given policy buffers to organize itself and meet the challenge ahead on an equal footing

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Retail Sector in the East : Current Scenario, Growth Prospects and Upcoming Projects
The retail sector in Eastern India is largely Kolkata-centric. The city of Kolkata has come a long way in terms of retail maturity with a proliferation of brands and organised retail chains. Shopping trends in the city have witnessed a radical shift over the recent years from the conventional trader run stand alone shops to more organized & large retail formats. Evidently, the future of retailing in the city lies in new-age shopping malls, which provide variety, value and convenience in a more comfortable environment. This is also evident by a surge in the consumer spending on branded goods in the recent times; for example the city's Music World outlet has recorded the highest earnings per square feet amongst all its outlets in the country. The city has also welcomed the other retail chains such as Pantaloons, Westside and Shoppers Stop. Though Kolkata has been a bit late in catching up with the retail revolution in the country, the city has great potential to become a retail hub in the near future. Going by the 1991 census, the city qualifies as the second largest metro market in India; nearly one out of every six shops located in the countrys top 25 cities, can be traced to Kolkata. To a market strategist, Kolkata undoubtedly is an ideal location for the growth of the retail industry. Besides being the principal retail-and-services market to a vast hinterland comprising of the eastern and northeastern states of the country, the city also serves as a center of trade and commerce for the region. Its proximity to Bangladesh, a country of 13 crore consumers, and to the South-East Asian markets, is another factor for which the city is fast emerging as a vibrant business center. The Kolkata Port and the Haldia Port are also instrumental in acting as gateways to landlocked countries like Nepal and Bhutan. The disposable incomes of Kolkatans have also been on the rise according to a report by the National Council of Applied Economic Research (NCAER), about 62% of the households in Kolkata had annual incomes of up to Rs.18, 000 in 1985-86; while just a decade later, the figure had touched Rs.25,000-77,000 for some 61% of the households. The city truly represents an amalgamation of the advantages of a metro city, and the comparatively modest living costs of a non-metro town. Lately, Kolkata has emerged as a strong prospective destination in the expansion plans of retailers and is now perceived as a latent but highly potential market. Prominent retail chains like Music World, Westside, Dominos, Pizza Hut,

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Shoppers Stop, WillsSport, Barista, and Pantaloons have already established their presence in the market. Apart from these new-age, large retail chains which have started operating successfully in the city, there are a large number of traditional, specialized markets like the Bowbazar market, Bagri market, China bazaar, Lake market, Burrabazar market, Chandni market, etc., and high-street markets at Park Street, Esplanade area, Camac Street, Shakespeare Sarani, Gariahat, which offer a wide variety of items like stationary items, dairy products, electronic goods and appliances, glassware, crockery, wooden furniture, jewellery, musical instruments, fruits, flowers, vegetables, fish, flesh meat, textiles, spices, dry fruits, sugar, salt, groceries, paints, hardware items, etc. Besides these markets, there are small-format, non-branded shopping complexes/malls like the A/C Market, Vardaan Market, New Market, and the Shreeram Arcade, which offer a wide variety of items, from garments, watches, and footwear, to consumer durables like household electronic gadgets. The two prominent fun-entertainment/amusement parks in Kolkata which have gained immense popularity among the masses, particularly children, are Nicco Park, and Aquatica. Situated in Salt Lake, and spread over an area of 40 acres, Nicco Park, promoted by the Nicco Group, can be termed as the Disneyland of West Bengal, with a variety of unusual and exciting games and rides like the Toy Train, Cable Car, Tilt-a-Whirl, Water Chute, Water Coaster, Flying Saucer, Pirate Ship, and Moonraker. The Cave Ride is the latest addition, and is perhaps the only of its kind in this part of the world. Aquatica, An 8-acre water park, is situated at Rajarhat in Kolkata, which came up in 2000. This Theme Park offers visitors a cool respite from the heat and grime of city life. The park, which can accommodate around 5000 people, has an artificial river meandering through it. Visitors can swim and wade in the river water, which is recycled every hour for maintaining the cleanliness. Aquatica has breathtaking rides such as the Black Hole, Tornado and Wave Pool. The Aqua Dance Floor, where visitors can sway to non-stop music, has waterspraying nozzles on the roof which fill the surrounding air with water. Aquatica also hosts big events and programmes like fashion shows which are great crowd-pullers.

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The medium and large-format, branded and non-branded shopping complexes/malls which have come up in Kolkata, and are operating successfully, are : Forum It is a two lakh square feet mall, situated on Elgin Road , in South Kolkata with Shoppers Stop as anchor .This shopping mall established by Sunsam properties within the Saraf Group was opened to the public in March 2003 , with the launch of Shoppers Stop. Along with the retail brands having their outlets, the Forum also houses, a 300 capacity food court and a 4-auditorium multiplex called INOX. The multiplex, INOX has been the first of its kind in the city, having a sitting capacity for over 1000 viewers, and situated over 30000 square feet. Hence it can be really a great experience of shopping and movie-going for the Kolkatans, who do not want to compromise on the quality aspect. The retail outlets at Forum have witnessed almost 30-35 % increase in sales after the opening up of the multiplex in 2003. Most retailers are extremely happy with the growth rate and expect their sales to increase further in the coming months .At INOX , ticket sales have been averaging at almost 90% of the theatre capacity the highest box office sales amongst all the multiplexes in the country . Forum has truly changed the experience of Kolkatans with regard to shopping and entertainment in the city. 22 Camac Street This large format-shopping complex is located on Camac Street .The retail brands like Pantaloons ,Westside , Pizza Hut , Planet M, Grain of Salt and Add Life , have already set up their outlets in the complex. It has 4 distinct blocks with a common atrium. The most advantageous aspect here is its huge parking space in the basement. It also houses smaller multi-branded outlets. The footfalls stay steady throughout the week and gets to an uncontrollable high over the weekend .Some of the outlets rank among the leading individual retail outlets of the country . The total floor area of the complex is 380,000 square feet , and has 4 restaurants and 3 banquet halls . Metro Plaza Situated on Ho Chi Minh Sarani , this is basically a large scale retail cum office development area . The lower three floors with an area of 50,000-60,000 square feet is meant for retail business. Along with the retail units there is also a space for Bowling which is frequented by younger people.

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 Emami No. 1 This mall is located on Lord Sinha Road . Its close proximity to the ChowringheePark Street belt helps it to cater to a large section of quality conscious consumers. The usual facilities of power backup, vertical transportation and parking are available over here. The biggest disadvantage that it faces is its car parking area, which has a meagre capacity of just 70 cars at a time. The biggest attraction here is its Landmark bookstore on the third floor, which has a wide range of books, music and stationary items. City Centre: The recently inaugurated City Centre project adds another feather to the already vibrant retail business in the city. The project, promoted by industrialist Harshvardhan Neotia, and located at Salt Lake, has been designed by one of Indias best known architects, Charles Correa. City Centre is a dynamic mix of shopping mall, Cineplex (INOX), entertainment area, food court, offices, and residences- nestling amidst open spaces, lush greens, and the contours of an ideal cityscape. Big brands like Shoppers Stop and Adidas have set up their shops in the complex. There are several aspects to City Centre ; with no boundaries to separate it from the street, it is open to everyone- all income and age groups. The Complex has a parking space for as many as 800 cars, 14 entry and exit points, and large spaces to amble around. The City Centre, which is the single-largest architectural endeavour in Kolkata in recent times, has truly changed the way the city looks, and complements the citys artistic heritage. The location of the project makes Salt Lake the epicenter of not just its immediate population (nearly half a million), but also of the upcoming, adjoining township of Rajarhat (with an expected population of about 750,000). Enclave Spread over 36,000 sq. ft., the Enclave, has come up at up-market Alipore,and has five shopping levels, and an open-to-sky atrium. The complex, promoted by the alcutta Metropolitan Group, has fine restaurants including Food Bar, Red Bar, Cookee Bar, coffee shops, a childrens entertainment zone named Kool Kids, among other facilities. Another prominent supermarket which offers a wide range of products, and provides customers with a great shopping experience, is C3- The Market Place. The shop commands over 6100 sq.ft. in the heart of Kolkata, at Lee Residency, 26, Lee Road. The approximately 25,000-strong product menu includes a wide range of products like fresh fruits and vegetables, rare herbs, groceries, ready-toeat food, personal-care items,confectionaries, chocolates, home-care products, newspapers, magazines, and so on.

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Though the retail business mainly revolves around Kolkata, towns like Durgapur, Siliguri and Haldia also have the potential of becoming busy retail addresses. Already, the Durgapur City Centre project, promoted by Bengal Shristi Infrastructure Development Ltd., has come up in Durgapur, in Burdwan district. The project, which was inaugurated on the 10th of August, 2003, is a modern, multi-facility, multi-utility, urban plaza, spread over a sprawling 370,000 sq.ft. It is a confluence of shopping, commerce, entertainment, education, recreation, health, hospitality, medical amenities, and premium residential accommodation. Lush green open spaces, an integrated entertainment multiplex, and various other urban amenities, provide a fascinating experience. Durgapur is well connected by both rail and road, and the project location is easily accessible from the bordering towns of Asansol, Ranigunj, Santiniketan, and Burnpur. A number of prominent projects in the retail sector are coming up in Kolkata. Some of these are: South City: The upcoming, 31-acre South City project promises of a lifestyle of international standards. The project will have four 35-storey residential towers, a sprawling club, a shopping mall with entertainment zones, and a multiplex. Modern technology will ensure earthquake resistance, high-speed elevators, adequate firefighting and protection systems, internal security and traffic management, and all conceivable civic comforts. The in-complex South City Academy, spread over 3.5 acres, will be equipped with a learning resource center, gym, cafeteria, an auditorium for extracurricular activities like debates, dramatics, and sports, and a soccer field. The South City Club will have an airconditioned sports center, guest rooms, banquet facilities, swimming pools, a dining restaurant, a pub lounge, a business center, and a health club, among other things. The mega complex will also have Indias largest shopping mall- the Junction, spread across an area of 700,000 sq.ft., which will have large anchor stores, a multiplex, a food court, a six-screen Cineplex, an entertainment zone, and parking space for nearly 800 cars. The team behind this big venture comprises a host of experienced architects and developers. Among them are : Dulal Mukherjee & Associates (the principal architects); Mani Square: Mani Square, a proposed project on a 4-acre plot next to Apollo Gleneagles Hospital on E.M.Bypass, will have a 500,000 sq ft. space, which will include a technology park, a 6-screen multiplex , a food court , business club , a multilevel 1000-car parking area , a 40,000 sq ft. hypermart ( Giant ), as well as other direct retail stores .Designed and engineered by SAA Architects of Singapore and Meinhardt of Australia , and promoted by the Mani Group, Mani

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Square will be the single stop solution to all requirements of modern-day professionals and customers . The project will have ready-to-use centrally airconditioned offices with 100% power back-up ,leaselines and round-the-clock support services , which will be extremely attractive for IT and ITeS companies .Retail giants like Lifestyle , Westside , Shoppers Stop and Cineplex majors like Shringar and PVR have already shown interest to set up units in the complex . Gariahat Mall Gariahat Mall, which is coming up at an area between the Gariahat crossing, and the Rashbehari- EM Bypass Connector, will approximately be of 80,000 sq.ft., and will be accessible from every point in the southern belt of the city. The 5-floor structure will boast of world-class facilities and ambience, an expansive atrium, high ceilings, capsule lifts, and multi-level access up to the top floor. The scientific fusion of lofty ceilings, flat slabs, and a central atrium illuminated by natural light, is intended to evoke a sense of space, height, and depth. While an entire block has been earmarked for the anchor shop, the 3 rd and the 4th floors are entirely reserved for jewellery outlets, and the 5 th floor will house restaurants and eating places. Metropolis The 1,41,000 sq.ft. Metropolis will be one of Kolkatas newest retailcumentertainment addresses. The complex will have a 4-screen, 1000-seater Cineplex, a 6- outlet food court, a sports bar, a restaurant, and a 350-capacity car park. Being developed by the Calcutta Metropolitan Group (CMG), the Metropolis is designed by the reputed architectural firm, Peddle Thorp International of Hong Kong, and will come up at an area adjacent to CMGs prestigious existing residential complex, Hiland Park, which has about 900 apartments and 35 penthouses. Metropolis will have the Hyatt Regency, ITC Sonar Bangla, Peerless Hospital, and Udayan Condoville among its distinguished neighbours. Silver Springs Silver Springs, a prestigious joint venture project between Bengal Silver Springs Projects Ltd. and the Kolkata Municipal Corporation, is due for a December, 2005 completion. Shapoorji Pallonji has done the piling of Silver Springs, and renowned architect J.P.Agarwal has designed the project. The project will have around 500 residential flats, 10 high-rises of 18 and 14 stories, a magnificent shopping mall named Silver Arcade, of 70,000 sq.ft. area, and a Spring Club of an area of 70,000 sq.ft. The vendors at the shopping mall include Mainland China and a Hyundai dealer- showroom. Silver Arcade will be a G+3 mall, with

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the 3rd floor being taken up by Mainland China for 3 speciality restaurants; while the 2nd floor will have a Food Court with 17 multi-cuisine food counters. The mall will be backed by a large parking space for 150 cars. Silver Springs will boast of a modern, up-market residential complex, the shopping mall, Silver Arcade, a Montessori School, an AC Community Hall, among other new-age facilities Property Tax rates for commercial, tenanted premises in different cities: Kolkata KMC) Bangalore/ Chennai/ Delhi/ Gurgaon/ Navi Mumbai It is thus absolutely necessary for the concerned authorities to take necessary steps for rationalization of the municipal tax rates in Kolkata to prevent loss of business, employment, and development opportunities. The relevant provisions of the Shops & Establishment Act stipulate that a commercial establishment of any kind (which includes a retail operation) must allow its employees one and a half day of leave for every week of work. It also stipulates the total number of hours that any establishment can remain open for business on any working day. In this competitive environment virtually every retail, entertainment and food business requires to conduct its business every day of the week and provisions like this severely inhibit their profitability. A number of retail environments have been asked to pay an entertainment tax for the music that they play in their stores. In fact it has also been reported that such taxes also demanded if a television is used inside such an establishment. This is our view in punitive since such music or television is not intended to provide any formal entertainment. There is confusion about the size, number and nature of the signage that a commercial establishment is allowed to display outside its premises. The KMC has of late begun to demand tax on such signage at the same rates as are applicable to hoardings. A standard needs to be instituted proportionate to the area occupied by a commercial establishment indicating dimensions of the free signage permitted by the establishment so that there is no confusion that is allowed to persist in this connection. The issue of fixing of Maximum Retail Price (MRP) by manufacturers, which is making retailers uncompetitive, needs to be addressed urgently.

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Retail Education in the East

The retail sector, which is poised for robust future growth, needs more and more professionally qualified personnel, with specialized knowledge in retailing. It is thus necessary to have more and more business schools in the country, which offer specialized courses in retailing. The need for providing quality retail management education has been recognized by the ICFAI Business School in Kolkata, which offers a comprehensive retail management programme that enables the students to critically analyze the retailing process, the environment within which it operates, and the institutions and functions that are performed. The course aims to make students aware of the differences between retail marketing strategy and financial strategy, and provides knowledge of merchandise management. The programme inculcates analytical skills useful for retail decision-making, and provides a foundation for those students who plan to make career in the field of retailing or related disciplines. The course covers critical topics like understanding the retail customer, and institutions; retail marketing strategies; retail organization & management; pricing strategies; retail selling; logistics & information systems, etc. Recently, the International School of Business & Media has, in its newly inaugurated campus at Salt Lake, Kolkata, started offering a 2-year full-time Post Graduate Programme in Management, with retail management as on of the specializations. The course covers essential topics like retail organization & management; introduction to risk management; retail location analysis; branding the retail organization; retail marketing & sales strategy, etc. This course has been launched looking at the tremendous growth potential of the retail sector in the coming years, and aims to gear up students to the rapidly changing business environment. Quality retail education is necessary to create a vast pool of qualified retail management professionals who can tackle the challenges of this intensely competitive industry. To cater to the increasing demand for technically efficient workforce in the retail sector, more and more management institutions in the country should design and introduce innovative retail management programmes.

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Retail as an Employment Generator

The retail sector can generate huge employment opportunities, and can lead to job-led economic growth. In most major economies, services form the largest sector for creating employment. US alone have over 12% of its employable workforce engaged in the retail sector. The retail sector in India employs nearly 21 million people, accounting for roughly 6.7% of the total employment. However, employment in organised retailing is still very low, because of the small share of organised retail business in the total Indian retail trade. The share of organised retailing in India, at around 2%, is abysmally low, compared to 80% in the USA, 40% in Thailand, or 20% in China, thus leaving the huge market potential largely untapped. A modern retail/retail services sector has the potential of creating over 2 million new (direct) jobs within the next 6 years in the country (assuming only 8-10% share of organised retailing). Retail can create as many new jobs as the BPO/ITES sector in India. A strong retail front-end can also provide the necessary fillip to agriculture & food processing, handicrafts, and small & medium manufacturing enterprises, creating millions of new jobs indirectly. Through its strong linkages with sectors like tourism and hospitality, retail has the potential of creating jobs in these sectors also. Though the Planning Commission has identified retail as a prospective employment generator, in order to strengthen the multiplier effect of the growth in organized retailing upon the overall employment situation, a pro-active governmental support mechanism needs to evolve for nurturing the sector. Issues like FDI in retail, allocation of government-controlled land on more favorable terms, strong political and bureaucratic leadership, etc., need to be addressed adequately.

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Why You Should Consider Retailing As Career

Entry level management positions -Department manager or assistant buyer/planner -Manage and have P&L responsibility on your first job Starting pay average with great benefits No two days are alike Buying for financially oriented people Management for people.

Misconceptions About Careers in Retailing

Dont need college Low pay Long hours Boring Dead-end job No benefits Everyone is part-time Unstable environment

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CHAPTER 7
LIMITATIONS & RECOMMENDATIONS

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LIMITATIONS
The sample size for the research was small. The area covered for the research was less. The time constraint was also one limtation.

RECOMMENDATIONS
The sample size should be increased. The area covered should be more, in order to do better research, more of the area should be covered. Area other than delhi/NCR should be covered.

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CHAPTER 8 CONCLUSION

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Conclusion
In India the retail sector is the second largest employer after agriculture, although it is highly fragmented and predominantly consists of small independent, owner managed shops . There are over 12 million retail outlets in India , and organised retail trade is worth about Rs.12,90,000 crore (September,2003). The country is witnessing a period of boom in retail trade, mainly on account of a gradual increase in the disposable incomes of the middle and upper-middle class households. More and more corporate houses including large real estate companies are coming into the retail business, directly or indirectly, in the form of mall and shopping center builders and managers. New formats like super markets and large discount and department stores have started influencing the traditional looks of bookstores, furnishing stores and chemist shops. The retail revolution, apart from bringing in sweeping, positive changes in the quality of life in the metros and bigger towns, is also bringing in slow changes in lifestyle in the smaller towns of India. Increase in literacy, exposure to media, greater availability and penetration of a variety of consumer goods into the interiors of the country, have all resulted in narrowing down the spending differences between the consumers of larger metros and those of smaller towns. However, the supply of quality real estate space would be instrumental in propelling the future growth momentum of the retail sector in India. The addition of better and affordable retail space would enable retailers to deliver more betterquality products and services to the consumers, resulting in increase in operational efficiencies and decline in costs for the supply chain. India is one of the complex real estate markets in the world due to the large degree of variation and inconsistence in the market practice and regulatory norms. A combined effort by both central and state governments in terms of appropriate zoning laws transparency in ownership, and availability of loans for retail land, is very much necessary for reducing existing bottlenecks. Accordance of industry status to retail in India is an issue that needs to be addressed soon. Recognition would ease financing prospects, as well as standardize and unify taxes for the industry. An alignment of the retail sector with the tourism sector could also promote India as a global shopping hub. For the retail sector to achieve further growth, the spread of organised retailing has to become a national phenomenon.

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The top 6 cities will account for 66% of total organised retailing. Although many international retailers and brands still regard India as too difficult, they would welcome the opportunity to create an appropriate joint venture, if they felt India was changing. The growth of the organised retail industry in the country will mean thousands of new jobs, increasing income levels and living standards, better products, and services, a better shopping experience, and more social activities

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